All Franchisees Are Not Created Equal!
Having met dozens of active and prospective franchisees over the years, we’ve noticed at least two different types of mindsets. Many franchisees are of the owner-operator mindset; they think of themselves as the driver of a bus that is their franchise business. They hire and personally train the people that help their business succeed. Yet more often these days we are seeing larger scale thinking from franchisees, especially multi-unit and multi-brand franchisees. In their mind, they want to own a fleet of buses, they’ll hire many drivers (managers) who are responsible for the staffing, vendor relations, community involvement and customer satisfaction that consistently results in success on a much larger scale compared to a single unit owner-operator.
Are Franchisors Seeking Multi-Unit Mindset Franchisees?
Once a franchisor has developed proven systems for marketing, operations, technology, training, branding, etc., they need good operators that can execute on those processes. While owner-operator franchisees may be a good fit for smaller cities or markets, things change when we focus on major metro areas. If a franchisor determines that they need 10 units to blanket a bigger city, like Atlanta, do they want 10 individual franchisees with 10 different ideas about how things should be done, or do they want one multi-unit operator with funding and experience that allows them to be accountable for all 10 units? This is why some franchisors will only consider multi-unit franchise developers for their brand expansion.
What One Franchisor Has to Say:
“The hardest jump for many franchisees to make is opening a second unit. While many of the innate characteristics in a single-unit franchisee are often found in multi-unit franchisees, the characteristics that stand out the most are mastering delegation and time management.”
– Jonathan Weathington
CEO of Shuckin’ Shack Oyster Bars
What Should Franchisors Do For Brand New Franchisees?
For just a few hundred dollars each month, a franchisor could provide new franchisees with professional accounting services for the first year or two that would deliver genuine benefits to their new business owners that include:
- Time Management: Having an outside service take accountability for bookkeeping, payroll and franchise reporting means your new franchisees are focused on the things that matter most to their future success; amazing customer experiences and employee retention. During the first year or two in business, it’s very easy for new franchisees to get overwhelmed – especially if they’re new to this type of business. Give them the gift of time when it matters most to make sure they succeed in the first two years when most other businesses fail!
- Tax Preparation: When tax filing deadlines are looming and stressing out many business owners, your new franchisees will be calm because your Preferred Service Provider has everything well documented and can deliver required reports to a tax preparer of their choice. Speaking of taxes, all of these accounting and bookkeeping services are tax deductible!
- Item 19 Reporting: Because your preferred accounting firm is well aware of your chart of accounts and reporting requirements, putting a well organized Item 19 into place for your Franchise Disclosure Document (FDD) is only a headache for those existing franchisees still trying to do everything themselves and struggling to meet your financial reporting requests.
- Punctual Payroll: Employee retention has certainly become a critical business topic lately, and nothing causes employee dissent faster than delayed or missing payroll. If your franchisees are not responsible for that task, and paychecks are timely and accurate consistently, happy employees abound!
- Mindset Shift: Getting new franchisees, especially single-unit franchisees with an owner-operator mindset, to think about the parts of their franchise business they don’t actually need to worry about, allows them to focus on making customers happy, increasing margins and growing their fleet, all while expanding your franchise brand.
Top 2 Bottom provides bookkeeping and accounting services for franchisees, plus financial reporting solutions for franchisors. Contact us today to discover the many benefits we bring to franchisors who add T2B as a Preferred Service Provider within your franchise system. We’ll not only provide free accounting training to your new franchisees, we’ll also provide bookkeeping support services to your existing franchise network.